Intel Corporation Beats Earnings and Sales Estimates

Intel released its latest earnings report after closing bell tonight, posting earnings of 64 cents per share on $14.5 billion in revenue. Analysts had been expecting earnings of 59 cents per share on $14.22 billion in revenue. In the same quarter last year, the chip maker reported earnings of 66 cents per share and $14.6 billion in revenue.

Intel revenue on high end of guidance

Net income was $3.1 billion, while operating income was $4.2 billion. Intel generated about $5.7 billion in cash from operations and recorded a gross margin of 63% and said its third quarter revenue beat the midpoint of management’s guidance. Sales were roughly flat year over year, with Intel recording growth in its Data Center business, Internet of Things, and non-volatile memory segment. The growth in those areas offset a decline in client revenue.

Intel’s Client Computing Group saw revenue fall 7% year over year to $8.5 billion, while its Data Center Group recorded a 12% year over year increase to $4.1 billion. The Internet of Things Group saw revenue climb 10% compared to last year to $581 million, while the Software and Services operating segments’ revenue was flat year over year at $556 million.

“We executed well in the third quarter and delivered solid results in a challenging economic environment,” Intel CEO Brian Krzanich said in a statement. “The quarter demonstrates Intel innovation in action. Customers are excited about our new 6th Gen Intel Core processor, and we introduced our breakthrough 3D XPoint™ technology, the industry’s first new memory category in more than two decades.”

The chip maker paid out $1.1 billion in dividends and spent $1 billion to buy back 36 million shares of its stock during the third quarter.

Intel provides guidance

Intel management said they expect fourth quarter revenue to be around $14.8 billion, +/-$500 million. They expect a gross margin of approximately 62% for the fourth quarter, +/- “a couple of percentage points.”

The chip maker expects to spend about $25 million on restructuring charges and $7.3 billion, +/- $500 million on capital spending for the full year.

Shares of Intel edged downward in after-hours trading, falling as much as 0.16% to $31.99 per share.